Post-reform Kenya likely to get IMF loan

Ulhas Joglekar ulhasj at
Fri Jan 7 16:08:50 PST 2000

7 January 2000 Post-reform Kenya likely to get IMF loan WASHINGTON: Kenya must accelerate structural reform and do more to fight corruption in order to win back the confidence of financial markets, the International Monetary Fund said. Summarizing a December 16 review of the Kenyan economy, an IMF statement on Wednesday said recent economic progress created a "good basis" for talks about a new IMF loan. The fund halted lending to Kenya in mid-1997 because it was worried about what it terms "governance" -- an IMF code word for official corruption. "Directors stressed...that significant and sustained efforts will be needed before a comprehensive programme that addresses the concerns of the Kenyan population, investors and donors could be put in place," the IMF said. Kenyan financial markets rallied late last year on news that the IMF was ready to restart talks on lending. Finance minister Chris Okemo said on Wednesday that preliminary discussions would open on January 24 and that the government was committed to enhancing transparency, strengthening the implementation of the budget and improving the operation of anti-corruption agencies. The IMF noted that corruption, a deteriorating infrastructure and an inefficient services sector had depressed investment, lowered confidence and hurt Kenyan growth. Projecting a slim 1.6 percent rise in gross domestic product in 1999, down from 1.8 percent in 1998, it said: "Investor confidence has remained weak and growth has continued to decline". The IMF welcomed government efforts to curb corruption, but said more was needed. "Directors commended Kenya for pursuing generally cautious macroeconomic policies since early 1998, but noted that weak economic growth had persisted over this period, partly on account of slow progress in the areas of governance and structural reform," it said. "They observed that this had had adverse effects on investor and donor confidence and had resulted in increased poverty and deteriorating social indicators." (Reuters) For reprint rights: Times Syndication Service
For comments and feedback send Email Bennett, Coleman & Co. Ltd. 1999.

More information about the lbo-talk mailing list